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US Tax on foreign property? Interest Deduction?

Asked Jan 6, 2007, 01:11 AM — 2 Answers
I am a US Citizen (US Marine) who has a Swedish Wife (with Green Card). We have bought a house in Sweden.

We pay Swedish taxes on the house, and the rental income.

Do I have a tax obligation to the IRS? Can I deduct the mortgage interest on my US Taxes?

Any advice greatly appreciated, thanks!

Brett

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IntlTax's Avatar
IntlTax Posts: 812, Reputation: 118
Tax Expert
  
#2

Jan 7, 2007, 06:04 PM


As long as the mortgage interest would have been deductible if the house were in the U.S., then it would be deductible with a property outside the U.S. If the mortgage loan is not denominated in U.S. Dollars, then repayment (or refinancing) of the loan may trigger taxable currency gains. If you rent the property, then you must include the income on your U.S. Tax return (and can claim a foreign tax credit for foreign taxes paid).
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AtlantaTaxExpert's Avatar
AtlantaTaxExpert Posts: 19,864, Reputation: 3723
Senior Tax Expert
  
#3

Jan 8, 2007, 01:15 PM


IntlTax has subbed for me this weekend superbly!

I have nothing to add!
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